Bill Nutting and Si Redd
I am currently reading Jack Harpster's King of the Slots: William "Si" Redd which is a pretty good read (Redd was quite a character having been in the coin-op business since 1933).
The book had more detail on Redd's association (pun intended) with Bill Nutting and a LOT more information about the birth of video poker (which was actually connected to Atari).
For the full story you can read Harpster's book (I plan to include a long sidebar on video poker in my book) but here are some brief details.
According to the book, not only did Redd buy Nutting Associates (from records at the CA secretary of state's office, this probably occurred in 1977) but he actually hired Bill Nutting as production manager for A-1 Supply's amusement machine division along with a few other Nutting Associated employees.
Part of the reason he did this was to provide a cover for his video gambling games, which were a kind of gray area.
As for the Atari connection (other than through Bill Nutting). Back when Pong came out, Redd immediately saw the potential for video gambling games. He even tried to talk Bally's William O'Donnell into buying Atari (at the time Redd was head of Bally Distributing in Reno).
When O'Donnell declined, Redd had engineer Dale Frey create a prototype video blackjack game, which he showed to O'Donnell who wasn't interested (since Frey had produced the game on his "kitchen table", O'Donnell thought everyone else could make one too and amateurs just didn't make Bally machines).
Redd then purchased 24 Atari Space Race machines for $100 each (this was probably in early 1975 or maybe late 1974) and had Frey convert them to blackjack machines, which he sold to bars in Utah. Since the games didn't pay out, they weren't technically gambling games (or so Redd thought).
|A-1's 1975 vieo poker game. Photo taken from Jack Harpster's King of Slots, Kindle edition. Original photo courtesy of Dale Rodesch. Not the cabinet, which appears (to me) to be an Atari Space Race.|
Another operator challenged the games, the Utah attorney general agreed that they were gambling games after all, and into a warehouse they went.
Redd then sold his share in Bally Distributing to O'Donnell and Bally Manufacturing for $7 million. He actually wanted $9 million but when the told O'Donnell that the video games were worth $1.5 million, O'Donnell told him that if they were worth that much he could just keep them and even signed a five-year noncompete agreement for video gambling games (other than video reel slots).
Redd and Dale Rodesch (who later designed Quarter Horse, which may have been the first laser disc video game) attached an RF modulator to one of their video blackjack games and took it to the 1975 AMOA show where they demoed it (unaware that they were broadcasting to every TV set in the hotel).
A-1 also made a kit to convert Pong and Space Race games to video 21.
In 1976 Dale Frey created a video poker game, possibly the first one ever, and the rest is history.
 Harpster doesn't name what Atari game was used. He says it was their second game that involved "moving an object through a maze ". Atari's second game was Space Race and wasn't a maze game. Gotcha was a maze game but the photo of the game cabinet in Harpster's book is not a Gotcha cabinet but appears to be a Space Race cabinet.
Allied's Name of the Game
The second item concerns another home video game created in 1976 by URL.
An article in the June 29, 1979 Chicago Herald reports that URL had also released another home game in 1976 that proved to be the company's ruin. After lining up 60,000 orders, their chip supplier was able to deliver only 1/4th of what they needed by the crucial Christmas deadline
[Ed Polanek] We shipped to Sears until Christmas Eve morning…Until December 25, electronic games are good business, but on December 26, it's nothing. We couldn't find a market for 45,000 used customized components.
The details of this story sound awfully similar to those for Allied's Name of the Game and I wonder if that game was actually built by URL (who already had a relationship with Allied, having built boards for Paddle Battle).